Health Reform Tea Leaves Turn "Brown"

In a move that caught most of the nation by surprise, voters in heavily Democratic Massachusetts catapulted Republican Scott Brown into the U.S. Senate last night to fill the seat vacated by the late Ted Kennedy. This morning, just hours after that stunning development, the precise implications for health reform remain unclear. Brown ran on a campaign pledge to deliver a death blow to the pending federal health reform legislation, a message that apparently resonated with enough moderate Democrats and Independents in Massachusetts to send him to Washington. That will be hard for many Congressional Democrats to simply ignore.

And it may be difficult for the President to ignore. Swirling within the Beltway this morning are rumors that the White House is weighing several options, including a plan to pull the insurance exchanges and taxpayer-provided premium subsidies out of reform legislation, essentially leaving some insurance market reforms and changes to the Medicare program.

But Democratic leaders still have meaningful cards to play. Under White House pressure, the House of Representatives might quickly offer up the Senate's health reform bill for a straight "yes or no" vote, entertaining no amendments. If Speaker Nancy Pelosi (D-CA) can find 217 other Democrats willing to vote "yes," we'll have health reform, Senate style, perhaps in less than a fortnight.

Many House Democrats have said recently that they cannot vote for the Senate legislation as it stands, so great are the differences between the health reform bills passed by the two chambers. But those views might change now that it appears the House cannot send a comprehensive health reform bill of any kind back to the Senate and expect it to pass, with Scott Brown supplying the Republicans with sufficient seats to sustain a filibuster.

Another option is for the House to quickly take its health reform legislation and break it into two bills, one with all the budget-related provisions (such as the government-run "public option," the insurance exchanges, taxpayer-provided subsidies toward the purchase of insurance, tax increases and Medicare changes), and one with everything else, such as the insurance market reforms. If the House can pass both bills, the Senate would then take them up and could employ its "reconciliation" process to push the budget-related bill through with a filibuster-proof simple majority of 51 votes. The non-budget-related bill would be vulnerable to a filibuster. However, most of that bill's provisions would not be particularly controversial.

A third option is a sort of hybrid approach, where the House passes the Senate bill but House leaders assure their more progressive colleagues that the Congress will quickly come back to fix the contentious issues later, using the reconciliation process.

But the question nobody can answer this morning is what individual Democratic senators and representatives, particularly the moderates, infer from last night's election, and what they're willing to risk to push the pending legislation through. In the hard, cold light of dawn today, the reality is that the Democratic Party lost a senate race it never expected to lose. True, Brown's opponent ran an uninspired campaign, but there might be something else at play here. Polls have shown a slow but steady erosion in public support for the current health reform plans, and Brown's surprising victory puts an unexpected GOP face on what the polls have been suggesting.

We should know very shortly now which track the health reform train will take from this point forward. If Brown's win does, indeed, signal the beginning of the end for the President's ambitious health reform measure, the demise will come with a hard bit of irony. Brown replaces Ted Kennedy, who fought all his political life for health reform of the sort sitting now in the Congress, just short of the goal line.

History tells us that epic, defining battles sometimes turn on unexpected twists. Now it appears the health reform fight might turn on the most implausible of events: a little known Republican, campaigning from a pickup truck in the very heart of the Democratic Party's most secure bastion, wins the Senate seat held by a Kennedy for almost half a century. After nine months of bitter Congressional wrangling over health reform, it's difficult to imagine anything more astonishing.

Lockton Benefit Group prepares this Health Reform Briefing Summary to keep you apprised about the unfolding health reform effort in Washington, D.C.